President Donald Trump wants the Federal Reserve to keep the economy bloated with weakened post-2008 dollars. He thinks that will boost exports. And he wants to keep U.S. stocks floating on the freakish levels of monetary liquidity created by the Fed when Ben Bernanke was chair.

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“America is now booming like never before. Other countries are doing very poorly. That makes it even harder for us to be successful. Plus, we have a gentleman that likes raising interest rates in the Fed.

“We have a gentleman that loves quantitative tightening in the Fed. We have a gentleman that likes a very strong dollar in the Fed. So with all of those things — we want a strong dollar but let’s be reasonable — with all of that we’re doing great.

The sum of USD currency in circulation outside Federal Reserve Banks and the U.S. Treasury, plus deposits held by depository institutions at Federal Reserve Banks–known as the Adjusted Monetary Base–is nearly four times greater than what it was in 2008.

It’s the most radical experiment to have ever been undertaken with the Dollar.

These politicians and central bankers created 3 new dollars for every 1 dollar in existence and call that monetary madness “quantitative easing” as if there’s anything gentle about effectively stealing 75% of all the circulating money held as U.S. Dollars in ten years.

And then after the Fed blows the money supply up to 400% its previous amount in six years, Trump calls it “tightening” when they pare back just 10% of the new amount in two years.

The Adjusted Monetary Base is calculated as the sum of currency, including coins, in circulation outside Federal Reserve Banks and the U.S. Treasury, plus deposits held by depository institutions at Federal Reserve Banks. These data are adjusted for the effects of changes in statutory reserve requirements on the quantity of base money held by depository institutions. Source: Federal Reserve Bank of St. Louis

Trump administration officials say a strong dollar makes Americans buy more from overseas, while foreigners buy less from Americans, and reasons this hurts American businesses.

This is a quite unsophisticated, mercantilist view of global commerce that dates back to the 16th century.

About The Author

Grew up reading Isaac Asimov, J.R.R. Tolkien, The Bible, Ayn Rand, John Locke, and Robert Heinlein while listening to conservative talk radio, reading used economics textbooks, and reading through most mainstream political newspapers and magazines.